Liquidated Jewish Bank in Frankfurt Settles All Claims

August 3, 1954

FRANKFURT (Aug. 2)

All domestic claims against the former “Jewish Bank” here have been settled in full, and most of the recognized foreign depositors and creditors will be satisfied within the next few weeks, it was learned here today when a local judge approved a two-year-old proposal of the creditors’ conference to terminate and rescind the pending bankruptcy proceedings.

These proceedings were compulsorily instituted almost four years ago not by the bank itself or by the creditors, as is customary, but by the State of Hesse. It was done to the accompaniment of an officially inspired flurry of publicity, with newspapers throughout Germany announcing in front-page banner headlines that the owners had fled to Switzerland, with millions of marks of the bank’s assets in their pockets.

Now that the bankruptcy proceedings have been abandoned, however, the announcement is buried in a few lines on the financial page, or omitted altogether. Most Germans will, therefore, continue to believe that huge restitution funds were embezzled by the officers of the bank.

The “Jewish Restitution Bank,” as it was originally called, was closed in 1950 on charges that it had violated German banking laws and foreign currency control legislation. Some of the people connected with it were later convicted of bankruptcy fraud, even though the remaining assets were sufficiently large for a satisfactory settlement. This was hitherto prevented by the authorities, who insisted upon keeping the bank innocently receivership.

It is hoped to wind up the banked liquidation in the course of this month. The private creditors’ committee in Switzerland will receive a lump sum for internal distribution. Those clients of the bank not registered with the committee, but who have recognized claims, will automatically receive payment in full.